Social exchange theory is a social psychological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that all human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives. For example, when a person perceives the costs of relationship as outweighing the perceived benefits, then the theory predicts that the person will choose to leave the relationship.

The early permutations of Social Exchange Theory stem from Gouldner's (1960) norm of reciprocity, which simply argues that people ought to return benefits given to them in a relationship. Later modifications to this theory focus attention on relational development and maintenance rules (see Murstein et al.) [added by J.P. Boren, 2005]

For social exchange theorists, when the costs and benefits are equal in a relationship, then that relationship is defined as equitable. The notion of equity is a core part of social exchange theory.

Social exchange theory is intimately tied to rational choice theory, and features all of its main assumptions.

Sugiyama, L., Tooby, J. & Cosmides, L. (2002). Cross-cultural evidence of cognitive adaptations for social exchange among the Shiwiar of Ecuadorian Amazonia. Proceedings of the National Academy of Sciences, 99(17), 11537-11542. Full text